Milwaukee archdiocesan bankruptcy case sent to mediation

A federal bankruptcy-court judge has sent the case of the Milwaukee archdiocese to mediation, in a fresh effort to avoid further prolonged litigation.

"The point of this is to try to negotiate a resolution quickly and stop the legal fees," Judge Susan Kelley said as she announced her decision to order mediation. The contentious bankruptcy proceedings, begun in January 2011, have to date failed to produce a plan for reorganizing the finances of the archdiocese that would satisfy creditors. An earlier attempt at mediation, in 2012, failed.

The judge's new order made a direct reference to the enormous legal fees generated by the lengthy proceedings. The archdiocese now faces $14 million in fees-- a sum likely to dwarf the payments to sex-abuse victims, whose claims led to the bankruptcy filing. Judge Kelley approved an immediate payment of about $1.4 million to attorneys, with that sum divided equally between the creditors' lawyers and those representing the Milwaukee archdiocese.

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